On Tuesday, stock index futures edged higher, driven by gains in Bitcoin and tech stocks, as traders attempted to recover from a sluggish start to December trading. Gold extended its decline, dropping below $4,200 per ounce.

As of the latest update, Dow futures rose 0.10%, S&P 500 futures gained 0.24%, and Nasdaq futures climbed 0.33%.

European stocks saw modest gains, with the Stoxx 600 hovering just above the flatline amid mixed sector performance and lack of consensus across major exchanges. Markets struggled to regain momentum following a broad sell-off on the first trading day of the new month.

Healthcare stocks led the decline, falling 0.3%, weighed down by weakness in heavyweights AstraZeneca and Novo Nordisk. However, Bayer surged nearly 15%, limiting the sector's losses. The rally came after former U.S. President Donald Trump urged the Supreme Court to hear Bayer's appeal against lawsuits alleging its Roundup herbicide causes cancer.

Asian equities initially rose about 0.5% before paring gains.

**Japanese Bond Market Stabilizes** Strong demand at Japan's final 10-year government bond auction helped stabilize the market following turbulence sparked by speculation about a potential Bank of Japan (BOJ) rate hike.

The USD/JPY rose 0.37% to 156.01 after hitting a two-week low on Monday. The rebound followed a well-received 10-year bond auction—the most sought-after since September—which triggered a recovery in ultra-long yields after hitting intraday highs.

"The auction results appear to have calmed the market somewhat," said Shoki Omori, chief trading strategist at Mizuho Securities in Tokyo.

On Monday, BOJ Governor Kazuo Ueda's remarks that the central bank would weigh the "pros and cons" of raising rates at its next meeting sent shockwaves through markets. Japan's two-year bond yield surged above 1% for the first time since 2008, triggering a global bond sell-off that dragged down equities, cryptocurrencies, and the dollar.

The sell-off rippled across global bond markets—pushing the 10-year U.S. Treasury yield up nearly 8 basis points and the 10-year German bund yield up 6 basis points—while pressuring equities.

**Bitcoin Rebounds After Plunge** The crypto sector remained cautious despite Bitcoin's slight recovery from Monday's 5% plunge, which came amid a broader risk-off sentiment early in the week.

Market sentiment stayed bearish, with derivatives positioning indicating traders were bracing for another steep drop.

Bitcoin inched up less than 1% over 24 hours to around $87,000, having traded above $90,000 last week before tumbling toward $85,000 on Sunday and Monday. The cryptocurrency is now down 30% from its October peak.

"Traders are closely watching Bitcoin's key support at $80,000, with many expecting a breakdown and predicting a drop to $65,000–$74,000," wrote analysts at Binance. "The market is divided—some are adding short positions on rallies, while a few are attempting buys at $86,900 but facing skepticism."

Jehan Chu, founder of blockchain venture firm Kenetic Capital, noted, "Crypto sentiment oscillates between fear and resignation. The latest drop caught investors off guard. The coming months are critical, but even the most bullish may prepare to hibernate."

December's rocky start followed a crypto sell-off and the BOJ's hawkish signals, shifting focus to the Federal Reserve's upcoming meeting for clues on U.S. rate policy.

**Fed Rate Cut Bets Rise** Markets now price in an 87% chance of a 25-basis-point Fed rate cut at the December 10–11 meeting, up from 63% a month ago, per CME FedWatch. Weak U.S. manufacturing data added pressure for easing.

The dollar held steady Tuesday, though some anticipate a prolonged downtrend as the U.S. may cut rates faster and deeper than peers.

Monday's data reinforced rate-cut expectations, showing U.S. manufacturing contracted for a ninth straight month in November, though holiday e-commerce spending beat forecasts at $23.6 billion.

**Gold Tumbles** Gold fell 1% to below $4,200/oz, down nearly $40 on the day but still just 4% off October's record high. Silver dropped almost 2%.

"Gold is softer today, but fundamentals remain supportive—including expected U.S. rate cuts," said Tim Waterer, chief analyst at KCM Trade. He noted caution ahead of Fed Chair Jerome Powell's remarks and Friday's core PCE inflation data.

**Wall Street Bull Sees S&P 500 at 7,300** Fundstrat's Tom Lee predicts a year-end rally, forecasting the S&P 500 could surge 10% to 7,300 by December, citing Fed policy shifts and parallels to 2019's post-QT rebound.

**Stocks to Watch** - Citigroup rose nearly 9% premarket after raising its 2025 sales forecast. - Trump-linked Bitcoin miner American Bitcoin plunged 22% amid crypto weakness. - Warner Bros Discovery gained 1.5% on a cash-heavy takeover offer from Netflix. - Credo surged 16% after record Q2 revenue. - Marvell Tech rose over 1% on reports of a $5B bid for Celestial AI. - Fitell skyrocketed 40% on a $3M buyback plan. - Canadian Solar climbed 2.7% on U.S. business adjustments. - MongoDB jumped 23% on strong Q3 results. - XPeng fell 4% after November deliveries dropped 12.58% month-on-month. - Pony.ai extended gains 2.5%, marking a sixth straight rise on bullish analyst calls.